I don’t know what they are talking about with regard to Cork and Galway, I rent in Cork and next door was vacant for the past 3 months before someone took it, I’ve two friends who had no issue getting accommodation 500m from Eyre Sq. in Galway.
It tells me that there is increased supply which should equal lower prices but I am basing this on my rational supply/demand economics and common sense both of which failed me in 2001, 2002, 2003 etc. etc.
I am now wondering if the same mentality that allowed the sheeple to be convinced that house prices can only go up and which was self fulfilling for far longer than anyone (including uber bulls) expected can now be used to push up rental even though the fundamentals don’t stack up.
Spoke to a friend over the weekend who is putting is apartment up for rent cost it’s not selling “for what it’s worth”. Expect to see every Thomas, Richard and Harold think they will put up their “investments” for rent as there is “huge demand”.
I can’t see how that would be possible. The property bubble was essentially supported by people hording houses (their “property portfolios”). Rental market can’t work like that, unless people are stupid enough to go renting multiple properties…
Good point Gekko, unless “What the developers do next” after they buy their properties from themselves to let them out is that they then rent them from them selves as well to prop up the rental market!!
But seriously when will the increase in supply translate into lower rents, News talk were very clearly saying that rents were up by up to 30% in certain areas, are they telling pokies?
I am willing to believe that rents have risen in the last couple of years, revbounding from extremely low levels in 2002-2003. Further, I have expected that initially rents would come under upward pressure as people forstalled their buying frenzy, which would precede the flood of vacant property onto the market - which seems to be occurring now.
From there we will see rents come under downward pressure again. So far, it seems to be playing out in line with my expectations, so I have no reason yet to revise my thinking.
The observations on Newtalk could simply be backward looking - any year-on-year data will lag actual conditions by at least 6-9 months, simply due to the maths of it all.
The program was only talking about renting in the city centres. I don’t know about Cork or Galway, but they’re bang on the money regarding supply in Dublin. The graph might say there’s a lot of unrented places in Dublin as a whole, but demand for city centre places is much higher than supply.
Posted this before but I love repeating myself. t makes what I say more believable.
We started renting after returning from UK in Oct 2006. We paid a crazy amount 1500 for a tiny 2 bed apartment. Contrast this to a 2 Bed house in a good area for £700 in UK. the house was literily 3 times the size of apartment and the build quality in Ireland … (you know all this.)
Imagion my surprise when the apartment mortgage holder asked for 1650 in Sept. I done my research and found daft reporting 1500 the appropriate price for the area. I pointed this out to the mortgage holder and they said I was wrong. They said they could see numerous apartments for rent in the area for 1800. I said I was refering to the daft report not advertisers asking prices. I pointed out that there would be a difference but it fell on deaf ears. I then pointed out that 20 meters from the apartments there were 520 new apartments coming on line in the next 3 months. I pointed out that 20% of these (based on trends) would be looking for tenants. That is over 100 apartments. This caused visable pain on the mortgage holds face. They then capitulated and offered to meet me half way. I agreed. However, as with standard leases I can pull out with 1 months notice. If rents drop below what I am paying I will be straight on the phone to the mortgage holder ro re-negotiate.
As for rents in the area. They are asking for 1800. However, most lose 1 or 2 months rent in an effort to get this figure. I have watched the adverts.
I think this is a greedy way of doing business. Basically it is cutting off your nose to spite your face. Potentially they believe they need to hold out to get a nice high rent as their mortgage payment is so steep. They probably think if they get a high rent then they lock this in. They don’t envisage the possibility of rents actually dropping. So this 1/2 months loss will not come back to haunt them when their tenant demands a drop in rent.
Personally I think many many stupid people have become investors in Ireland in the last few years and they have these mad, half thought through ideas which will hammer them in time. It goes back to Warren Buffetts saying about being caught naked.
Some people (even on the Pin) have never experienced vacancies and have never had to work for tenants etc etc. But these people only know the boom and while they see the boom disappearing they think that their good times will last but I know otherwise.
I personally believe a lot of people who think they are sitting pretty right now will be very sorry in a years time.
The rental market is effected more by seasonal adjustment than the sales market. I used to do a bit of rentals and in my opinion tenants that are looking during the second half of Nov and Dec, well you have to question why they are looking at that time of year and should you find decent tenants, a landlord would be more than willing to take a serious enough drop in rent on grounds that the place is not vacant for the three months about christmas. But the reverse is true on good family homes to let in May and June along with flats, apartments and houses in student areas during August to Sept. rents shoot up.
so if you are a tenant with a part 4 tenancy and want to take the mick ask for a rent review about christmas, it can’t be recalled for another year. just make sure you have some comparisons that would be deamed to be similar enough to your place.
I wouldn’t really expect rents to start coming down in Dublin for another few months(6?), though nationally they have already started falling as of September according to the CSO. Of course one month is not trend but national the rental price growth rate was slowing in the months prior to September.